Long battle over Refugio oil pipeline spill comes to an end

Payments of a $70 million settlement agreement are set to be disbursed to landowners affected by the 2015 Refugio State Beach oil spill in Santa Barbara County this month following the expiration of the final appeal period. The settlement with the Pacific Pipeline Company brings an end to a long-running legal battle between the company and the property owners.

"The settlement ends a nine-year battle to win compensation for the property owners whose land is burdened with the pipeline," Barry Cappello of Cappello & Noël LLP, who represented the plaintiffs, said in a news release on Monday.  "It was a long process, but justice has finally been delivered."

Counsel for the plaintiffs included attorneys from three firms, including Cappello, David L. Cousineau, Lawrence J. Conlan and Leila J. Noël of Cappello & Noël in Santa Barbara, Robert J. Nelson of Lieff Cabraser Heimann & Bernstein LLP in San Francisco and Keller Rohrback attorneys Juli E. Farris and Lynn L. Sarko in Seattle.

Pacific Pipeline Company was represented by Dawn Sestito and Lauren F. Kaplan of O'Melveny & Myers LLP in Los Angeles and Jessica L. Stebbins Bina of Latham & Watkins LLP in Los Angeles. They did not respond to phoned or emailed requests for comment by press time on Tuesday.

Signatories to the settlement included Pacific Pipeline Co. and its parent, Sable Offshore Corp.

The class members were property owners who held easements contracts with the pipeline's original constructor entered some 30 years prior to the spill. Grey Fox LLC et al v. Plains All American Pipeline LP et al., 2:16-CV-03157 (C.D. Cal., filed Jan. 28, 2020).

According to Cappello, they became concerned in the aftermath of the 2015 spill after the pipeline's owners at the time, Plains All American Pipeline LP, announced plans to build a new pipeline without new easements.

Plains settled out of the case before selling the pipeline to Exxon Mobil Corp., which subsequently sold it to Sable, Cappello said in a phone call on Tuesday.

"By this time, everybody is now talking about, 'Maybe we got to mediate this thing,'" Cappello said. "So, we go to a series of mediations with Exxon and Sable, and ultimately make a deal, and Sable puts up the money."

In addition to monetary relief for the landowners, the settlement also holds Pacific Pipeline to the terms of a consent decree requiring the use of certain safety technologies, as well as a commitment to installing automatic shutoff safety valves.

"In exchange, the class agrees that settling parties may repair and reopen the pipeline, record notice of easement clarifications, and install automatic shutoff valves," the settlement read.

Cappello said Pacific Pipeline has elected to repair the pipeline, gaining approval from government agencies including the state fire marshal.

Sable Offshore announced in October that repairs on the pipeline had already begun.

"PPC has more than 30 predominantly union pipeline repair crews making these repairs and is currently working with all landowners and government agencies to complete this important work, with restart of the pipeline expected by the end of 2024," the company's statement read.

The $70 million will be distributed in two installments, with the first checks going out this month, Cappello said.

Capello said the settlement is unique as an agreement based on the language of specific documents, describing the work of his colleagues as a "master class" for attorneys in actions concerning similar easements moving forward.

"If another oil spill occurs involving a pipeline in California - actually anywhere, because this was a federal court case - you can use the theories we used in this case to make sure landowners are properly compensated," he said.